All five appeals of revenue relate to assessment years 1991-92 to 1995-96. We heard all appeals together and disposing of same by this common order. 2. Let us first take ITA. No. 119/Mds./99 which relates to assessment year 1991-92. only issue arises for consideration is regarding valuation of share of Tata Tea Ltd. for purpose of capital gains. 3. We heard both representatives of revenue and assessee. Tata Tea Ltd. offered to buy majority of shares in Consolidated Coffee Ltd. Tata Tea Ltd. offered one share of Tata Tea Ltd. and Rs. 100 for every two shares of Consolidated Coffee Ltd. For purpose of capital gain, Assessing Officer took market rate of Tata Tea Ltd. on date of exchange at Rs. 320. However, on appeal by assessee, first Appellate authority found that market value of Tata Tea Ltd. would become relevant only when assessee sells share of Tata Tea Ltd. In this case, since there was exchange of Tata Tea Ltd. for Consolidated Coffee Ltd., first Appellate authority directed Assessing Officer to levy capital gain by adopting face value of shares of Tata Tea Ltd. only objection of revenue is that if shares of Tata Tea Ltd. were sold by assessee, they could have realized market value. Therefore, market value should be taken as consideration for purpose of levy of capital gains. We find that very same issue of exchange of shares of Tata Tea Ltd. and Consolidated Coffee Ltd. came before Madras High Court in case of AR. Alagappa Chettiar v. ITO [2004] 267 ITR 749 for assessment year 1991-92. After considering identical factual situation, Madras High Court held that capital gain shall be calculated on basis of value of one share of Tata Tea Ltd. at Rs. 147. In case on our hand, facts are identical to that of case decided by Madras High Court. In our opinion, judgment of Madras High Court in case of AR. Alagappa Chettiar (supra) would be squarely applicable to facts of case. Therefore, by following judgment of Madras High Court in case of AR. Alagappa Chettiar (supra), we direct Assessing Officer to recompute capital gain by taking value of one share of Tata Tea Ltd. at Rs. 147. 4. In result, order of CIT(A) is modified to extent indicated above and appeal filed by revenue in ITA No. 119/Mds./99 is partly allowed. 5. next appeal in I.T.A. No. 120/Mds./99 relates to assessment year 1992-93. first ground of appeal relates to expenditure incurred by assessee on advertisement inviting deposits. 6. We heard both representatives of revenue and assessee. T h i s issue of expenditure on advertisement inviting deposit also arises for consideration in I.T.A. Nos. 121 and 122/Mds./99 for assessment years 1993-94 and 1994-95. assessee claimed expenditure relating to advertisement inviting deposit as revenue expenditure. Assessing Officer disallowed claim of assessee. However, on appeal by assessee, first Appellate authority allowed claim of assessee on ground that assessee was required to incur expenditure as per directions of Reserve Bank of India and provisions of Companies Act. only objection of revenue before this Tribunal is that expenditure incurred by assessee on advertisement inviting deposit from public are to be construed as capital expenditure in view of judgment of Supreme Court in case of Brooke Bond India Ltd. v. CIT [1997] 225 ITR 798. 7. We have also carefully gone through judgment of Supreme Court in case of Brooke Bond India Ltd. (supra). In case before Supreme Court, assessee incurred expenditure for purpose of raising capital base by issuing shares. In this case, expenditure is not for issuing shares but for making advertisement inviting deposit from public. Admittedly, assessee is non-banking business company and Reserve Bank of India permitted assessee to invite deposit from public. Inviting deposit under provisions of Companies Act cannot be equated to issue of shares for purpose of raising capital. There is difference between deposit and shares. Therefore, in our opinion, judgment of Supreme Court in case of Brooke Bond India Ltd. (supra) is not applicable to facts of this case. We find that very same issue of expenditure on advertisement came before Madras High Court in assessee's own case for assessment year 1984-85. Madras High Court, after considering provisions of section 58A of Income-tax Act and circular issued by CBDT in circular No. 240 dated 17-5-1978 (1979) 117 ITR (St.) 17 held that assessee-company is under statutory compulsion to advertise notice calling for deposits from public. Therefore, expenditure incurred on such advertisements is revenue in nature. Madras High Court also held that this expenditure on advertisement for inviting deposit from public does not form part of sales promotion expenses. Since issue raised by revenue has already been adjudicated by jurisdictional High Court in assessee's own case, in our opinion, judgment of Madras High Court would bind on both parties and also this Tribunal. Therefore, by respectfully following judgment of jurisdictional High Court in case of CIT v. Investment Trust of India Ltd. [2003] 264 ITR 506 (Mad.), we hold that expenditure incurred by assessee on advertisements inviting deposits from public is revenue expenditure. Therefore, we do not find any infirmity in order of lower authority. Accordingly, we confirm same. 8. In result, this ground of appeal is rejected. 9. next ground of appeal for assessment year 1993-94 is regarding claim of assessee for depreciation on Bio-Gas Generating System. This issue also arises for consideration for assessment year 1994-95. Mr. Shaji P. Jacob, learned Departmental Representative (D.R.) submitted that assessee purchased Bio-Gas Generating System from M/s. Western Paques India Ltd. and leased back same to very same company. Since asset was claimed to be purchased prior to 1-1-1993, entire cost of Bio-Gas Generating System was claimed as depreciation. assessee has also claimed to have purchased another Bio-Gas Generating System for assessment year 1993-94 and claimed depreciation for assessment year 1994-95. Assessing Officer, according to learned D.R., found that Bio-Gas Generating System was not installed at premises of M/s. Sandoz India Ltd., Bharuch, Gujarat. According to learned D.R., Bio-Gas Generating System said to have been installed at Vapi, was also found to be not correct. According to learned D.R., since machinery was not put to use for commercial production, claim of depreciation cannot be allowed. 10. On contrary, Mr. Rajagopalakrishnan, learned representative for assessee submitted that Western Paques India Ltd. is engaged in manufacturing and sale of bio-gas generating plants for commercial use. assessee has purchased bio-gas generating plants from Western Paques India Ltd. and leased out same to very same company. According to learned representative, business of assessee is leasing. Therefore, as far as assessee is concerned, machinery was put to use in assessee's leasing business as soon as it was handed over to Western Paques India Ltd. learned representative submitted that purchase of Bio-Gas Generating System and its lease back transaction was not denied by revenue. According to learned representative, only objection of revenue is that machinery or Bio-Gas Generating System was not installed in premises of M/s. Sandoz India Ltd. Bharuch, Gujarat. According to learned representative for assessee, transaction of leasing is between assessee and M/s. Western Paques India Ltd. Therefore, M/s. Sandoz India Ltd., Bharuch, Gujarat has no role to play in transaction between assessee and M/s. Western Paques India Ltd. According to learned representative, first Bio-Gas Generating System was installed by lessee M/s. Western Paques India Ltd. at Sandoz India Ltd., Bharuch in Gujarat State. After completion of project, plant was dismantled and retrieved by M/s. Western Paques India Ltd. learned representative further submitted that second Bio-Gas Generating System was proposed to be installed in Rohit Pulp & Paper Mills Ltd. at Vapi in State of Gujarat by lessor M/s. Western Paques India Ltd. According to learned representative, these informations were given by M/s. Western Paques India Ltd. which was passed on to Assessing Officer. plant which was originally planned to install at M/s. Rohit Pulp & Paper Mills Ltd. could not be installed due to technical reason and therefore, subsequently, it was installed at R & D Centre of Western Paques India Ltd., Pune. According to learned representative for assessee, all necessary correspondence to prove above facts were produced before Assessing Officer. In spite of this, according to learned representative, Assessing Officer has chosen to disallow claim of assessee on ground that machinery was not installed and not put to commercial production. According to learned representative, question of installation of plant does not arise in case of assessee. According to learned representative, assessee leased out Bio-Gas Generating System to M/s. Western Paques India Ltd. in ordinary course of its leasing business. Therefore, as soon as machinery was handed over to M/s. Western Paques India Ltd., machinery was put to use in leasing business of assessee. Merely because M/s. Western Paques India Ltd. could not install machinery as proposed, it does not amount to not utilizing machinery in leasing business of assessee. learned representative for assessee invited our attention to grounds of appeal raised by revenue and submitted that only objection of revenue in grounds of appeal in 2.4 of ground is that machinery leased out was not at all put to use. learned representative submitted that assuming for moment even if it is admitted for sake of argument that machinery was not installed and put to use by M/s. Western Paques India Ltd. to whom machinery was leased out, that would not disentitle assessee to make claim of depreciation. According to learned representative, as soon as assessee handed over machinery to M/s. Western Paques India Ltd., it would amount to put to use of machinery in leasing business of assessee. Therefore, assessee is entitled to depreciation at rate of 100 per cent as claimed. learned representative placed his reliance on judgment of Orissa High Court in case of Industrial Development Corporation of Orissa Ltd. v. CIT [2004] 268 ITR 130. 11. We have considered rival submissions on either side, and also perused material available on record. Admittedly, assessee is doing business in lease. M/s. Western Paques India Ltd. engaged in business of manufacturing and sale of Bio-Gas Generating System sold two plants to assessee and same was leased back to M/s. Western Paques India Ltd. first Bio-Gas Generating System was said to be installed in premises of M/s. Sandoz India Ltd. in State of Gujarat. Another equipment was proposed to be installed in premises Rohit Pulp & Paper Mills Ltd., Vapi, Gujarat. However, due to technical reasons M/s. Western Paques India Ltd. could not install Bio-Gas Generating System in business premises of M/s. Rohit Pulp & Paper Mills Ltd. Therefore, it was installed in premises of R&D Centre of Western Paques India Ltd., Pune. It appears assessee has also filed valuation certificate from valuer in respect of abovesaid two Bio-Gas Generating Systems. claim of depreciation was disallowed only on ground that statement of Senior Manager of M/s. Rohit Pulp & Paper Mills Ltd. was not rebutted. Assessing Officer has not examined anybody from Western Paques India Ltd. statement recorded by revenue from Senior Manager of Rohit Pulp & Paper Mills Ltd. and another person from M/s. Sandoz India Ltd. may be relevant for purpose of considering transaction between Western Paques India Ltd. and Rohit Pulp & Paper Mills Ltd. on one hand and M/s. Western Paques India Ltd. and Sandoz India Ltd. on other hand. assessee is claiming depreciation only in respect of transaction between assessee and M/s. Western Paques India Ltd. and subsequent installation of equipment by M/s. Western Paques India Ltd. in premises of M/s. Sandoz India Ltd. and Rohit Pulp & Paper Mills Ltd. may not be relevant for purpose of considering transaction between assessee and M/s. Western Paques India Ltd. assessee has explained that machinery installed in premises of Sandoz India Ltd. was dismantled after completion of pilot project and other equipment was installed in premises of R&D Centre of Western Paques India Ltd., Pune. This information given by assessee to revenue authorities could not be controverted by Department. As rightly submitted by learned representative for assessee, only objection of revenue taken up in ground No. 2.4 is that asset leased out was not put to use. Therefore, it is very clear that purchase and lease back transaction between assessee and M/s. Western Paques India Ltd. is not in dispute. existence or non-existence of machinery with M/s. Sandoz India Ltd. and Rohit Pulp & Paper Mills Ltd. are not relevant consideration for purpose of granting depreciation in respect of lease transaction between assessee and M/s. Western Paques India Ltd. Therefore, it is very clear that as soon as assets were handed over to M/s. Western Paques India Ltd., assessee put Bio-Gas Generating System in business of lessee. At no stretch of imagination it would be said that Bio-Gas Generating System was not put to use in business of assessee. 12. We have also carefully gone through order of first Appellate authority. first Appellate authority has rightly observed that insisting evidence from M/s. Sandoz India Ltd. and Rohit Pulp & Paper Mills Ltd. is not warranted since question arises for consideration is in respect of transaction between assessee and M/s. Western Paques India Ltd. Merely because M/s. Western Paques India Ltd. could not use machinery after taking them on lease from assessee or could not install machinery as proposed due to reasons best known to them, that would not deprive assessee from claiming depreciation in respect of lease transaction between assessee and M/s. Western Paques India Ltd. In view of above discussion, we do not find any infirmity in order of lower authority granting depreciation in respect of two Bio-Gas Generating System for assessment years 1992 93 and 1994-95. Accordingly, we confirm same. 13. Let us now take ITA No. 123/Mds./99 for assessment year 1995-96. first ground of appeal is regarding grant of depreciation on Boiler Ammonia Plant, Solar-Power Rural Radio Telephone System, Waste Heat Recovery Equipment, Wind Electric Generator and Rolling Mills Rolls. Mr. Shaji P. Jacob, learned D.R. submitted that assessee claimed 100 per cent depreciation in respect of abovesaid equipments. According to learned D.R., boiler was purchased from M/s. Madras Fertilizers Ltd. for Rs. 1,36,21,088 and same was claimed to be leased back to very same company by assessee. According to learned DR., boiler plant which is said to be purchased by assessee and leased back to M/s. Madras Fertilizers Ltd. was in existence for last few years. According to learned D.R., boiler was firmly embedded to earth. Therefore, it is immovable asset. Since it is immovable asset, according to learned D.R., boiler could not have been sold to assessee-company without sale of land in which boiler was firmly embedded. learned D.R. further submitted that entire sale and lease back transaction between assessee-company and Madras Fertilizers Ltd. is nothing but financial transaction. Therefore, it cannot be treated as lease back transaction. 14. learned D.R. further submitted that assessee-company entered into another lease back transaction with M/s. Renewable Energy Systems Ltd., Hyderabad. According to learned D.R., assessee claimed that 370 Nos. Solar Power Rural Radio Telephone System costing about Rs. 1,00,88,420 was Solar Power Rural Radio Telephone System costing about Rs. 1,00,88,420 was purchased at rate of Rs. 27,266 per unit from M/s. Renewable Energy Systems Ltd. and same was leased back to very same company. assessee further claimed that said equipment was sub-leased to Department o f Telecommunications by M/s. Renewable Energy Systems Ltd. According to t h e learned D.R., entire arrangement between assessee and M/s. Renewable Energy Systems Ltd. is nothing but financial transaction and therefore, it cannot be said that assessee leased out asset in its leasing business. 15. learned D.R. further submitted that assessee-company has also entered into lease transaction with M/s. Sree Rayalaseema Hi-Strength Hypo Ltd., and M/s. Prakash Industries Ltd. similar lease transaction was also claimed to have been made with M/s. Trident Steels Ltd. According to learned D.R., assessee claimed that Waste Heat Recovery Equipment was purchased from M/s. Sree Rayalaseema Hi-Strength Hypo Ltd. for Rs. 49,75,000 and same was leased back to very same company. assessee has also claimed that Wind Electric Generator was purchased from M/s. Prakash Industries Ltd. and same was leased back to very same company. Similarly, according to learned D.R., purchase was claimed to have been made in respect of Rolling Mills Rolls from M/s. Somash Steel Manufacturing Pvt. Ltd., Mumbai and same was leased to M/s. Trident Steels Ltd. According to learned D.R., entire transaction of assessee with respect to purchase and lease back transaction is only financial transaction and therefore, it cannot be construed as lease back transaction. Therefore, according to learned D.R., assessee is not entitled to any depreciation as claimed. learned DR placed his reliance on decision of Special Bench of this Tribunal in case of Mid East Portfolio Management Ltd. v. Dy. CIT [2003] 87 ITD 537 (Mum.). learned D.R. has also placed his reliance on judgment of Delhi High Court in case of Goyal Gases (P.) Ltd. v. CIT [1997] 227 ITR 536. learned D.R. again placed his reliance on judgment of Karnataka High Court in case of Avasarala Automation Ltd. v. Jt. CIT [2004] 266 ITR 178. 16. On contrary, Mr. K.R. Rajagopalakrishnan, learned representative for assessee submitted that admittedly, assessee purchased asset from respective companies. entire documents including invoices were produced before lower authorities to show that entire assets were purchased by assessee on payment of purchase price. learned representative for assessee submitted that after purchase, assessee became owner of asset. Therefore, in its capacity as owner of asset, same was introduced in leasing business of assessee. According to learned representative, assessees lease back machineries and boilers purchased from various companies and collected lease rentals in course of its business. Therefore, according to learned representative, it is not case of mere financial transaction but case of lease transaction. According to learned representative, sale and lease back transaction is not prohibited one in eye of law. learned representative for assessee invited our attention to decision of Special Bench of Mumbai Benches of this Tribunal in case of Mid East Portfolio Management Ltd. (supra) and submitted that sale and lease back transaction cannot be considered to be dubious or colourable device for tax evasion. According to learned representative, intention of parties has to be ascertained as held by Special Bench of Mumbai Benches in case of Mid East Portfolio Management Ltd. (supra). If intention of parties is really to sell machineries and to take same on lease, then it cannot be said that transaction was mere financial transaction. According to learned representative for assessee, in this case, intention of parties are very clear that respective companies sold assets to assessee- company and assessee-company purchased same after paying purchase price. Thereafter, assets were leased out in regular course of assessee's leasing business. Therefore, according to learned representative, it cannot be said that arrangement between assessee and other companies are mere financial transaction for purpose of raising funds. According to learned representative, intention of parties is not t o enter into any financial arrangement. learned representative further submitted that intention of assessee and other companies is to enter into lease back transaction. Therefore, according to learned representative, decision of Special Bench of this Tribunal is not applicable to facts of this case. 17. learned representative for assessee further submitted that assessee has paid sales tax for purchasing boiler and other machineries as per provisions of Sales Tax Act. Under Sales Tax Act, purchase of boiler and machineries were treated as sale of goods and sales tax authorities assessed transaction as one of sale and collected sales tax at applicable rate on transaction. Therefore, according to learned representative, it is not correct to say that boiler which was purchased by assessee from M/s. Madras Fertilizers Ltd. is not movable property. According to learned representative, boiler is one of movable properties and purchaser/assessee was made to pay sales tax at rate of 8 per cent. According to learned representative, in this case, assessee has actually paid sales tax and transaction was also subject-matter of assessment under Sales Tax Act. Therefore, according to learned representative, transaction has to be treated as one of sale transaction. learned representative for assessee further submitted that assessee has filed entire details before Assessing Officer in respect of Rolling Mills Rolls and Waste Recovery Equipment and other machineries. According to learned representative, when assessee has produced materials relevant to transaction, it cannot be rejected merely because no reply was obtained by Assessing Officer from supplier M/s. Somash Steel Manufacturing Pvt. Ltd. learned representative for assessee further submitted that assessee has entered into genuine lease back transaction and lease rental received has been declared to Department in regular course of assessment. learned representative for assessee further submitted that Orissa High Court in case of Industrial Development Corporation of Orissa Ltd. v. CIT [2004] 268 ITR 130 has upheld similar transaction. learned representative for assessee submitted that transaction which is otherwise valid in law cannot be treated as non est merely because some of factors go to reduce tax liability of assessee. According to learned representative, since assessee has entered into genuine transaction and intention of parties is very clear, it cannot be said that entire arrangement is device to reduce tax liability in manner unknown to provisions of law. According to learned representative, legal transaction which is permissible under law cannot be given colour to deny statutory benefit available to assessee under provisions of Income-tax Act. learned representative for assessee further submitted that assessee acquired ownership of assets leased back to various companies. Therefore, it has complied with requirement of provisions of Income-tax Act for purpose of grant of depreciation. learned representative for assessee placed his reliance on judgment of Gujarat High Court in case of CIT v. Pinnacle Finance Ltd. [2004] 268 ITR 395. learned representative for assessee further submitted that he is placing his reliance on judgments which are included in paper book filed by him. 18. We have considered rival submissions on either side, and also perused material available on record. Admittedly, assessee is in business of leasing. assessee claimed before lower authorities that they have purchased Boiler Ammonia Plant, Waste Heat Recovery Equipment. Wind Electric Generator, Solar Power Rural Radio Telephone Systems and Rolling Mills Rolls. After purchase, assessee leased back above equipments to various companies and received lease rentals. transaction between assessee and abovesaid companies regarding purchase and lease back was found by Assessing Officer as financial transaction and not lease transaction. On appeal by assessee, first Appellate authority found that there was genuine lease transaction and assessee leased out machineries in course of its ordinary business of leasing. Therefore, assessee is entitled to depreciation as claimed. main contention of revenue now before this Tribunal is that there was no lease back transaction and entire arrangement is only financial transaction and assessee claimed as lease back transaction in order to reduce tax liability which is colourable device. 19. We have carefully gone through entire material available on record i n respect of transaction which is subject-matter of this appeal. Let us first examine sale and lease back transaction between assessee and Madras Fertilizers Ltd. assessee purchased Boiler Ammonia Plant for sum of Rs. 1,36,21,088. M/s. Madras Fertilizers Ltd. raised proper purchase bill and sale 1,36,21,088. M/s. Madras Fertilizers Ltd. raised proper purchase bill and sale was also subjected to levy of sales tax at applicable rate. sale of boiler was sale of goods under Sales Tax Act. It is also not in dispute that Assessing Officer under Sales Tax Act assessed transaction as one of sale. lease deed was also executed. first monthly rental was payable on 23-9-1994 and subsequent monthly rents are to be paid on or before 23rd of every succeeding month. assessee has produced invoices, challans, bills, lease agreement, valuation report, etc. Assessing Officer, after examining materials filed by assessee found that boiler was integral part of Madras Fertilisers Ltd.'s Ammonia Plant and embedded to earth, therefore, it is immovable asset. According to Assessing Officer since boiler was firmly embedded to earth, it becomes immovable property. Therefore, sale of such boiler cannot be construed as sale of goods under Sale of Goods Act, 1930. Therefore, Assessing Officer concluded that transaction is only financial transaction and assessee is not entitled to depreciation as claimed. On appeal by assessee, first Appellate authority found that sale of boiler between assessee and Madras Fertilizers Ltd. was considered as sale of goods in sales tax assessment and value of boiler was deducted from block of assets in books of Madras Fertilizers Ltd. first Appellate authority concluded that assessee owned boiler which is leased to M/s. Madras Fertilizers Ltd. first Appellate authority further found that assessee is in business of leasing. Therefore, i n view of judgment of Supreme Court in case of CIT v. Shaan Finance (P.) Ltd. [1998] 231 ITR 308 assessee is entitled for depreciation in respect of assets which was leased out in course of its ordinary business. first Appellate authority also found that boiler is movable asset and sale was subjected to sales tax under provisions of Central Sales-tax Act and Tamil Nadu General Sales-tax Act. first Appellate authority further found that second-hand boilers are available in market and there are willing purchasers and sellers in field of chemical and textile zone. After examining invoices, insurance policy, valuation report, lease agreement and other materials, which were available before Assessing Officer, first Appellate authority found that there was genuine sale supported by evidence and there was genuine lease back transaction. Accordingly, first Appellate authority concluded that arrangement is not financial transaction. Therefore, first Appellate authority directed Assessing Officer to allow depreciation on boiler leased to Madras Fertilizers Ltd. 20. main contention of learned D.R. before this Tribunal is that boiler is immovable asset since it was firmly attached to land. other contention of learned D.R. is that entire sale and lease back transaction is nothing but financial transaction. We have carefully gone through decision of Special Bench of this Tribunal in case of Mid East Portfolio Management Ltd. (supra). After analyzing various case laws on subject, Special Bench of this Tribunal concluded that all sale and lease back transactions as such cannot be considered to be dubious or colourable device aimed at tax evasion. According to Special Bench, real intention of parties should be ascertained before concluding whether transaction was loan transaction or as lease back transaction. Special Bench further observed that genuineness of sale and lease back transaction should be gathered from intention of parties. Special Bench has also considered whether boiler firmly embedded on earth is movable goods or not. After analyzing various case laws, Special Bench at page 651 of ITD para 154 held that air pollution equipment and boilers are movable assets. In view of Special Bench decision holding that air pollution and boilers are movable assets, we do not find any substance in submission of learned D.R. that boiler is immovable asset. In our opinion, decision of Special Bench does not support case of revenue. Special Bench further observed that fact that there was only constructive or symbolic delivery of asset cannot by itself decide issue. According to Special Bench, decisive factor is intention of parties. If intention gathered from surrounding circumstances including contact of parties, it would be relevant factor to find out whether parties intended to sell assets to lessor. In view of Special Bench's decision, we have to first ascertain intention of parties on basis of surrounding circumstances. In this case, Assessing Officer brushed aside claim of assessee only on ground that boiler was firmly embedded on earth, therefore, it was not goods. It is not in dispute that boiler embedded on earth could be removed and it could be sold. first Appellate authority in fact found that there are markets for second-hand boilers. Sales-tax Act treats boiler as goods. When sales tax laws recognize boiler as movable goods, we do not find any reason to take different view under Income-tax Act. In those factual circumstances, in our opinion, first Appellate authority rightly found that boiler was movable goods. 21. nest question arises for consideration is what was intention of parties. invoices and other materials produced before lower authorities show that parties to transaction intended to sell boiler to assessee. assets were valued by independent valuer. After lease period, goods are to be re-delivered to assessee. In those factual circumstances, first Appellate authority found that transaction is real lease transaction. We have also carefully gone through Special Bench decision of this Tribunal on this aspect. case before Special Bench as per terms of lease, lessee was under obligation to purchase equipment after period of lease and lessee has no option to refuse to purchase back asset. assessee did not take insurance policy in respect of asset leased out. In case before Special Bench, there was no intention of parties to hand over or transfer goods to other party. In those factual circumstances, Special Bench found that transaction was notional one for purpose of raising funds, therefore, it is only financial transaction. Special Bench further observed that entire transactions were pre-planned. Special Bench also found that lessee company spread over 151 transactions for purpose of raising funds. In those factual circumstances, it was found that there was no real intention to sell asset to leasing companies. Special Bench further found that there was power of attorney authorizing lessee company to sell leased equipment. Therefore, Special Bench observed that power of attorney exposes device adopted by parties. In case on our hand, facts are entirely on different footing. assessee purchased boiler. lessee company raised proper invoices and purchase bill and sale was subject-matter of levy of sales tax and Assessing Officer under Sales-tax Act assessed transaction under Sales-tax Act. There was lease agreement to lease out boiler to M/s. Madras Fertilizers Ltd. After expiry of lease period, lessee shall deliver boiler to lessor at such place as lessor may specify in good condition. There is no compulsion on part of lessee to purchase boiler as in case of Special Bench. There was no power of attorney authorizing anybody to sell asset. asset was insured and valued by independent valuer. Valuation Officer clearly identifies boiler which was subject-matter of sale and lease back transaction. Therefore, it may not be correct to say that boiler could not be identified. After examining those factual aspects, first Appellate authority found that intention of party was to sell asset and to take back same asset on lease. In those factual circumstances, we do not find any infirmity in order of lower authority. In our opinion, intention of parties were to enter into genuine sale and lease back transaction. 22. We have also carefully gone through judgment of Orissa High Court in case of Industrial Development Corporation of Orissa Ltd. (supra). assessee before Orissa High Court is public limited company wholly owned by Government of Orissa. object of company is to establish industries which are likely to advance industrial development in State of Orissa. assessee entered into purchase-cum-lease agreement with Orissa State Electricity Board on 29-9-1995 to purchase electrical machinery of some sub-stations of Orissa State Electricity Board for price of Rs. 25 crores and leased out machinery back to Orissa State Electricity Board for lease rent of Rs. 34,38,00,000 for period of 60 months. assessee claimed depreciation at rate of 100 per cent. Assessing Officer allowed claim of assessee in assessment order made under section 143(3) of Income-tax Act, 1961. However, Commissioner of Income-tax by exercising his power under section 263 of Income-tax Act, set aside order of assessment on ground that it is erroneous and prejudicial to interest of revenue. order of Commissioner was confirmed by Income-tax Appellate Tribunal. On appeal by assessee before High Court, one of substantial questions raised before High Court was whether sale and lease back agreement is colourable device. High Court, after considering various case laws including judgment of Supreme Court in case of McDowell & Co. Ltd. v. CTO [1985] 154 ITR 148, held that Commissioner cannot discord sale and lease back agreement on ground that underlying motive of assessee to enter into said transaction was to reduce income-tax liability. Orissa High Court found that agreement between assessee and Orissa State Electricity Board is genuine sale and lease back transaction. Accordingly, Orissa High Court upheld transaction between assessee and Orissa State Electricity Board and confirmed order of Assessing Officer granting depreciation in respect of asset which was leased out to Orissa State Electricity Board. In our opinion, this judgment of Orissa High Court is squarely applicable to facts of this case. As we have already observed, intention of assessee before this Tribunal and M/s. Madras Fertilizers Ltd. was to sell boiler and to take same on lease. Even though boiler was utilised by Madras Fertilizers Ltd. few years back, in view of judgment of Orissa High Court and surrounding circumstances and terms and conditions of agreement clearly show that there was real sale and lease back transaction. Therefore, in our opinion, first Appellate authority rightly directed Assessing Officer to grant depreciation in respect of boiler. 23. We have also carefully gone through judgment of Karnataka High Court in case of Avasarala Automation Ltd. (supra). In case before t h e Karnataka High Court, assessee purchased machinery from Andhra Pradesh State Electricity Board for total consideration of Rs. 1,60,18,854 and leased back same to Andhra Pradesh State Electricity Board for monthly rent of Rs. 2,19,498.35 for period of 72 months. assessee claimed 100 per cent depreciation in respect of machinery leased out to Andhra Pradesh State Electricity Board. Assessing Officer held that transaction was not genuine, therefore, he rejected claim of assessee. On appeal by assessee, Tribunal found that sale transaction was not registered and machineries were not identified. On further appeal by assessee before Karnataka High Court, on facts of case, it was found that Andhra Pradesh State Electricity Board was interested in securing financial assistance by way of loan and for that purpose machinery was offered as security. This judgment of Karnataka High Court may not be helpful to revenue. In case on our hand, surrounding circumstances, which was gathered from material available on record, clearly shows that transaction of sale and lease back transaction is genuine and there is no intention on part of assessee to reduce its tax liability. Therefore, in our opinion, there was real sale and lease back transaction in respect of boiler and first Appellate authority has rightly directed Assessing Officer to allow depreciation. In view of judgment of Orissa High Court in case of Industrial Development Corporation of Orissa Ltd. (supra), in our opinion, judgment of Karnataka High Court may not be applicable to facts of present case. 24. next transaction is with regard to leasing of Solar Power Rural Radio Telephone System to M/s. Renewable Energy Systems Ltd. assessee purchased 370 Nos. Solar Power Rural Radio Telephone System for Rs. 1,00,88,420 at rate of 27,266 per unit and same was given back on lease. M/s. Renewable Energy Systems Ltd. in turn sub-leased Solar Power Rural Radio Telephone System to Department of Telecommunications. It appears from order of Assessing Officer that invoices and other material relating to transaction were produced before him. Assessing Officer disallowed claim of assessee only on ground that machinery was not put to use on or before 31-3-1995. Assessing Officer observed that Solar Power Rural Radio Telephone System could have been used only on or after date on which lease deed was signed by M/s. Renewable Energy Systems Ltd. with Department of Telecommunications. On appeal by assessee, first Appellate authority found that Solar Power Rural Radio Telephone System was put to use in business of assessee before 31-3- 1995. It is not in dispute that assessee-company is doing business of leasing. When Solar Power Rural Radio Telephone System was purchased from M/s. Renewable Energy Systems Ltd. and same was handed over to them in pursuance of agreement of lease, in our opinion, assessee has put machinery in use in business of leasing. Assessing Officer disallowed claim of assessee on ground that M/s. Renewable Energy Systems Ltd. could not have handed over equipment to Department of Telecommunications before 31-3-1995. subject-matter of appeal is between assessee and Renewable Energy Systems Ltd. We are not concerned about transaction between M/s. Renewable Energy Systems Ltd. and Department of Telecommunications. When assessee handed over asset to M/s. Renewable Energy Systems Ltd. in pursuance of lease agreement, it has to be construed that assessee has put equipment on use in business of leasing. Therefore, we find no justification in order of Assessing Officer rejecting claim of assessee. In our opinion, first Appellate authority has rightly found that Solar Power Rural Radio Telephone System was put in use and therefore, we do not find any infirmity in order of lower authority. 25. next transaction is with regard to Waste Heat Recovery Equipment. assessee leased out Waste Heat Recovery Equipment to Sree Rayalaseema Hi-Strength Hypo Ltd. Assessing Officer disallowed claim of assessee for reasons recorded in respect of sale of boiler in case of Madras Fertilizers Ltd. However, on appeal by assessee, first Appellate authority found that Waste Heat Recovery Equipment is movable goods and could be repossessed conveyed and shifted independently. According to first Appellate authority, Waste Heat Recovery Equipment could be sold as movable property. first Appellate authority also found that sale of Waste Heat Recovery Equipment was subjected to levy of sales tax in sales tax assessment as movable goods. only objection of revenue is that land in which equipment was affixed was not transferred to assessee. Therefore, Assessing Officer disallowed claim of assessee. similar issue came in case of Madras Fertilizers Ltd. We have elaborately discussed nature and transaction of boiler in case of Madras Fertilisers Ltd. agreement entered into between assessee and M/s. Sree Rayalassema Hi-Strength Hypo Ltd. are almost identical. structural nature of Waste Heat Recovery Equipment is also similar to one of ammonia plant. Valuation Report filed by assessee clearly identifies equipment which was leased out. In those factual circumstances and reasons elaborately discussed in case of Madras Fertilizers Ltd., we find assessee is entitled to depreciation as claimed. Therefore, we uphold order of lower authority. 26. next transaction arises for consideration is in respect of Wind Electric Generator with M/s. Prakash Industries Ltd. Assessing Officer found that land on which Wind Electric Generator stands was not registered that land on which Wind Electric Generator stands was not registered n d no sale of electricity was commenced. first Appellate authority, however, found that assessee was in business of leasing. Therefore, commencement of commercial production of electricity could not decide factum of eligibility for grant of depreciation. fact remains that assessee has purchased Wind Electric Generator from M/s. Prakash Industries Ltd. agreement between parties clearly says that there was lease transaction. invoices, lease agreement and other materials which were relevant to show intention of parties were produced before Assessing Officer. Mere non-registration of land cannot be ground to reject depreciation. transit insurance and inspection report may not be relevant material, since invoice, lease agreement, agreement between lessee and Tamil Nadu Electricity Board and other materials available on record show transaction. agreement entered into between assessee and M/s. Prakash Industries Ltd. is similar to one entered into between assessee and M/s. Renewable Energy Systems Ltd. for lease. facts are also identical as in case of Renewable Energy Systems Ltd. and Madras fertilizers Ltd. Therefore, for reason we have clearly discussed in case of transaction of boiler in case o f Madras Fertilizers Ltd. and Renewable Energy Systems Ltd., in our opinion, there was genuine lease transaction. Since assessee is in business of leasing, handing over possession would be more than sufficient for putting equipment on use in business of leasing. Merely because commercial production was not started that cannot be ground to say that machinery was not put in use. Admittedly, assessee is not in business of producing electricity. Therefore, mere non-production of electricity for sale is not ground to deny depreciation to assessee since there was genuine lease transaction between assessee and M/s. Prakash Industries Ltd. For reasons elaborately discussed by us in case of Madras Fertilizers Ltd., and M/s. Renewable Energy Systems Ltd. and for reason stated in judgment o f Orissa High Court in case of Industrial Development Corporation of Orissa Ltd. (supra), we uphold order of lower authorities. 27. next transaction is with regard to Rolling Mills Rolls with M/s. Trident Steels Ltd. Assessing Officer disallowed claim of assessee on ground that supplier of Rolling Mills Rolls M/s. Somash Steel Manufacturing Pvt. Ltd. and lessee M/s. Trident Steels Ltd. have not responded to queries raised by Assessing Officer. Assessing Officer has not disputed fact that assessee purchased Rolling Mills Rolls and leased back same to M/s. Trident Steels Ltd. Merely because supplier M/s. Somash Steel Manufacturing Pvt. Ltd. and lessee M/s. Trident Steels Ltd. have not responded to Assessing Officer that alone cannot be ground to reject claim of assessee when assessee has produced materials to show purchase and lease transaction. Transit insurance may not be relevant in view of invoice, lease agreement, delivery challan are material available on record to show transaction. Unless and until Assessing Officer found that lease transaction was bogus, in our opinion, it cannot be disallowed merely on ground that supplier and lessee have not responded. assessee has produced invoices, lease agreement and other relevant material before lower authorities to prove ownership, existence of equipment and lease transaction. In those factual circumstances, first Appellate authority, in our opinion, has rightly directed Assessing Officer to grant depreciation. In view of above discussion and for reason discussed in earlier part of this order in case of M/s. Renewable Energy Systems Ltd., we do not find any infirmity in order of lower authority. We find that facts are identical to that of M/s. Renewable Energy Systems Ltd. Therefore, we uphold order of CIT(A). 28. next ground of appeal is regarding disallowance of guest house expenses. We heard both representatives of assessee and revenue. guest house expenses cannot be allowed since it is not business expenditure. first Appellate authority, in our opinion, committed error in allowing guest house expenses. After going through material available on record, we find that guest house expense is not allowable expenditure under section 37(4) of Income-tax Act. Therefore, we set aside order of lower authority and restore that of Assessing Officer. 29. next ground of appeal is regarding research fee expenses. It appears assessee has not filed any details before Assessing Officer with regard to expenses. However, on going through details of material filed before first Appellate authority, CIT(A) allowed claim of filed before first Appellate authority, CIT(A) allowed claim of assessee. only objection of revenue is that first Appellate authority admitted additional evidence in violation of rule 46A of Income-tax Rules, 1962, we find that first Appellate authority, after verifying details filed by assessee, allowed claim of assessee with regard to research fee expenses. Since it is fresh material, in our opinion, there is violation of rule 46A. Therefore, we set aside order of lower authority and remand back issue to file of Assessing Officer. Assessing Officer shall reconsider claim of assessee regarding research fee expenses in light of material filed by assessee before CIT(A) afresh after giving sufficient opportunity to assessee and decide issue in accordance with law. 30. In result, ITA. Nos. 120, 121 and 122/Mds./99 are dismissed and ITA Nos. 119 and 123/Mds./99 are partly allowed. Per Chandra Poojari, Accountant Member.- After going through proposed order of ld. Brother, Hon'ble Judicial Member, I find it difficult to agree with conclusions as recorded by him, insofar as depreciation on assets which is subject-matter of sale and lease back transaction is concerned. However, I have benefit to go through proposed order of ld. Brother, but I am recording my reasons hereunder for deferring with view taken by ld. Brother. 2. I entirely agree with findings of ld. J. M. with regard to issue relating to valuation of shares of Tata Tea Ltd. in ITA No. 119/99 wherein CIT(A) order is modified to value shares at Rs.147 in-stead of Rs. 320 per share and on another issue of treatment of advertisement expenditure on inviting deposits which is common issue in ITA Nos. 120, 121 and 122/99 wherein order of CIT(A) is confirmed. 3. However, I am not able to agree with findings of ld. J.M on issue relating to allowability of depreciation on Bio-Gas Generating System for assessment year 1994-95 in ITA No. 122/99 in ground No. 2.3. Further, assessee has raised same ground in ITA No. 120/99 for assessment year 1993-94. 4. assessee has purchased two Bio-Gas Generating system from M/s. Western Paques India Ltd. for consideration of Rs. 50 lakhs each and same was leased back to M/s. WPIL. In first instance, assessee claimed that M/s. WPIL has installed first plant at premises of M/s. Sandoz, Bharuch, Gujarat and other one was installed at premises of M/s. Rohit Pulp and Papers Ltd. Vapi, Gujarat. Assessing Officer verified authenticity of statements of assessee regarding existing of plants at said places through Additional Director of Income-tax , Investigation, Unit-I, Pune, who submitted report that no such plants existed at those places. This information was based on sworn statement recorded by Asstt. Director Income-tax (Inv.), Surat from one Senior Manager, Administration viz., Shri Jatin Vakil of Rohit Pulp & Paper Ltd. and sworn statement recorded by Asstt. Director Income-tax (Inv.) Baroda from one Mr. Vijay Narayan, Works Accountant of M/s. Sandoz, Bharuch where both of them denied installation of plants in their respective premise. 5. Assessing Officer promptly put these reports to assessee to rebut same and Assessing Officer also obtained Valuation Report from M/s. Techno Economic Consultants, Pune who has valued plant at Rs. 2,53,000 each. 6. assessee vide its letter dated 27-3-1997 replied that M/s. WPIL has stated that it has leased plant to M/s. Sandoz India Ltd., Bharuch for their project and after completion of its project, plant was dismantled and retrieved by M/s. WPIL. However, assessee has not furnished any materials to show that plant was installed at premises of M/s. Sandoz India and it is burden of assessee to prove existence of asset and not department. 7. Regarding second plant said to be installed at site of M/s. Rohit Pulp & Papers Ltd. Vapi, assessee stated that project was not materialized and same plant was operated at R&D center of M/s. WPIL. 8. In both cases, assessee has not rebutted facts collected by Department from persons of M/s. Sandoz and M/s. Rohit Pulp & Papers Ltd. In addition to this, assessee failed to establish that plant at R&D was same plant what was leased to M/s. Rohit Pulp & Papers Ltd. Hence, there was serious doubt regarding existence of plants. Depreciation can be granted only when assets are existing and it cannot be granted on assets existing at vacuum. Though assessee is in leasing business, it is mandatory on part of assessee to identify assets when Assessing Officer specifically required assessee to prove very existence of assets as he doubted existence. assessee instead of proving existence of assets changed facts and switched over to new story which is very unfortunate. assets cannot be installed and put to use without its existence. In present case existence of asset itself is at vacuum. Assessing Officer has given ample opportunity to assessee to prove existence of assets. 9. assessee has failed miserably to prove existence of assets instead assessee is changing story often in support of its claim. All evidence collected by Department through Investigation wing was properly placed before assessee and comments sought for, but assessee has failed to make use of opportunity. mere production of documents which show that contract was made for purchase of assets at certain price does not conclusively establish correctness of claim made by assessee specially where Assessing Officer is of opinion that in deal assessee has taken resort to subterfuge or device in order to avoid tax liability which is liable to pay or otherwise has entered into transaction which is illusory or colourable device. In such case Assessing Officer can go behind contract and ascertain actual position for correct ascertainment of income-tax liability of assessee. valuation report is nothing but tissue paper as entire transaction is not genuine and entire arrangements are sham in nature and consideration of valuation report in isolation does not arise. I am of view that this issue is squarely covered by order of Special Bench Mumbai (supra). Hence, I have no hesitation in reversing order of CIT(A) and restoring that of Assessing Officer on this issue. 10. I also differ with findings of J.M. with regard to issue relating to grant of depreciation on plant and equipments raised by revenue in Ground No. 2.1 in ITA No. 123/99. 2.1 in ITA No. 123/99. 11. First issue relates to depreciation on Boiler Ammonia Plant which i s sale and lease back transaction between assessee and M/s. Madras Fertilizers Ltd. assessee has produced Sales Invoice, for having purchased plant from M/s. Madras Fertilizers Ltd. assessee also produced before Assessing Officer on 17-3-1998 documents like lease agreement, valuation report and other details as per assessee's letter dated 12-3-1998. However, other information sought by Assessing Officer vide his letter dated 9-3-1998 was not satisfactorily furnished. Assessing Officer denied depreciation on this plant on reason that Boiler is integral part of whole manufacturing process and cannot be hived off without shutting down plant for considerable period and at huge cost to production processes and this was working round clock and was embedded to earth and it is immovable asset and not severed from earth before sale. Further, he observed that no commissioning report was furnished by assessee and also depreciated value o f Boiler not disclosed by assessee and as such Assessing Officer treated sale and lease back transaction as financial transaction and denied depreciation. First appellate authority allowed appeal of assessee on reason that sale was subject to sales tax and assessee has produced commissioned report and depreciated value of Boiler was furnished to her and she was satisfied about genuineness of transactions. 12. Assessing Officer has denied depreciation not only for reason that it was not subject to sales tax but he was also of opinion that Boiler is integral part of whole manufacturing process and cannot be hived off without shutting down plant for considerable period and at huge cost to production processes and this was working round clock and was embedded to earth and it is immovable asset and not severed from earth before sale and particular Boiler sold to assessee-company is not clearly identifiable out of all Boilers in Ammonia Plant and sale invoice and Lease Deed do not clearly identify any particular Boiler sold to assessee out of all existing Boilers and all these reasons given by Assessing Officer were in cumulative in nature and are operative simultaneously. CIT(A) has only considered particular piece of findings of Assessing Officer and concluded case. It is just like blind person narrating elephant. Boiler plant in Fertilizer company is just like heart in human body. If person produces sale invoice for sale of his heart and claim that he has sold his heart, nobody can believe it as it cannot be removed from person when he is alive. Similarly, by merely producing sales invoice by assessee for sale of Boiler, it cannot be believed as surrounding circumstances say something otherwise. witness may tell lie, documents may spell lie but not circumstances. In order to ensure smooth and continuous functioning of M/s. Madras Fertilizer Ltd., it is very difficult to think that it has decided to sell its Boiler plant which is important plant and without it that industry cannot function. Boiler will come back as lease to M/s. Madras Fertilizer only when there was actual and genuine sale. It is admitted fact that Boiler was never severed from earth as it was never identified and it was embedded to earth and without severing there cannot be sale. sale said to have taken place is only imaginary in nature and not intended to be acted upon by parties and property in Boiler has not passed from one person to another, as there was no actual physical or symbolic delivery of Boiler. It was not severed from earth and removal of Boiler from embedded position really causes interruption to manufacturing activity of M/s. Madras Fertilizer Ltd., as I have already narrated above. Further, there is no evidence to show at least symbolic delivery as Boiler itself is not specifically identified and without identification there cannot be constructive or symbolic delivery. documents called for by Assessing Officer were not satisfactorily made available to him and he was put in dark. special Bench in case cited supra upheld contention of assessee that Boiler is movable asset in context that in that case all proceedings before Assessing Officer as well as CIT(A) went on with footing that Boiler is movable asset and for first time, issue relating movable or immovable raised before Tribunal by revenue and, therefore, Tribunal held that movable or immovable is subject-matter of evidence and investigation, it is for person contending that asset is immovable to show first that it is attached to or forms part of land. In present case in hand, facts and circumstances is not similar, on this aspect, instead, Assessing Officer in Assessment Order itself specifically mentioned that Boiler is embedded to earth and it does not fit into definition of 'Goods' in Sale of Goods Act. Being so, assessee has not produced any material to show that Boiler is not attached to earth. From this point of view also, I have to hold that Boiler is only immovable asset as being attached to land and there is no materials to show that seller intend to detach from land before sale. Being immovable asset, it does not fit into definition of 'Goods' as in Sale of Goods Act. intention of parties is only to arrange financial transaction and not that of effecting actual sale of Boiler. verification of intentions of parties at touch stone of human probabilities shows different picture. No document has been produced by assessee to show that M/s. Madras Fertilizer Ltd. was intent to deliver Boiler after expiry of lease period. Assessing Officer has clearly mentioned in Page 4 of assessment order that particular Boiler which is said to be sold to assessee is not clearly identifiable out of all Boilers in Ammonia Plant at premises of M/s. Madras Fertilisers Ltd. and without identification of Boiler sale cannot be made and thereby no lease also. Without prejudice to above, assessee has never produced depreciated value of assets and commissioned report before Assessing Officer. first appellate authority mentioned in her order that she has seen these documents. new documents were admitted by CIT(A) without calling remand report from Assessing Officer which is clear violation of rule 46A of IT Rules. CIT(A) also mentioned in her order that sale of Boiler is subject to sales tax. basis for such conclusion is not mentioned in her order and such documents, if any, was not produced before Assessing Officer. These documents cannot override real intention of parties as well as Explanation 3 of section 43(1). Assessing Officer has required assessee to produce various documents mentioned in his letter dated 9-3-1998 and assessee has not produced satisfactory information before Assessing Officer but produced for first time before CIT (Appeals). CIT(A) mentioned that Boiler value has been deducted from Block assets of M/s. Madras Fertilizer Ltd. Even if it is deducted from Block asset it cannot change result as at all times Boiler continued to remain with M/s. Madras Fertilizer Ltd. There is no iota of evidence to show that Boiler was severed from embedded position or it was identified. assessee is very smart business entity and has chosen unfair practice to create make believe documents with motive to claim depreciation and thereby reduce tax liability and this action of assessee has no legal sanction and assessee has just tried to get over its claim. principles laid down by Hon'ble Supreme Court in case of McDowell & Co. Ltd. (supra) are squarely applicable to present facts of case and other case laws relied by revenue supports view of Assessing Officer. Besides, case of assessee fails to fulfil major relevant factors prescribed by Special Bench (supra) at para 155. Further, judicial discipline requires consistency in its proceedings. Otherwise, propriety of judgment will be jeopardized as held by Hon'ble Gujarat High Court in case of Sayaji Iron & Engg. Co. Ltd., and also by Hon'ble Jurisdictional High Court in case of CIT v. L.G. Ramamurthi [1977] 110 ITR 453 (Mad.). In view of above discussion, I am of opinion that transactions is nothing but financial transaction on which assessee is not entitle to claim depreciation on Boiler and accordingly order of CIT(A) is reversed on this issue and order of Assessing Officer is restored. 13. Regarding allowability of depreciation on Solar Power Rural Radio Telephone System sale and leased back to M/s. Renewable Energy System Ltd., I am agreeing with findings of Ld. J.M. 14. Next issue relates claim of depreciation on Waste Heat Recovery Equipment which is sale and lease back transaction with M/s. Sree Rayalaseema Hi-Strength. Assessing Officer disallowed depreciation on this equipment on same reason as in case of Boiler, as sale and lease back transaction with M/s. Madras Fertilizer Ltd. In this case, Waste Heat Recovery Equipment was embedded to earth and land was not sold to assessee and as such system is immovable asset not fit into definition of 'Goods' as defined in Sale of Goods Act. In this case, on identical facts and circumstances, my finding is similar to that I have held in case of Boiler sale and lease back transaction with M/s. Madras Fertilizer Ltd. and, hence, assessee is not entitled for depreciation on this equipment. 15. next issue is with regard to claim of depreciation on Wind Electric Generator which is sale and lease back transaction with M/s. Prakash Industries Ltd. Assessing Officer disallowed depreciation on this asset on reason that M/s. Prakash Industries Ltd. has not furnished details called for and land on which Wind Electric Generator stands has not been registered. No sale of electricity and commissioning report and transit insurance for transport for equipment and inspection report were not submitted. In this case also, my findings is similar to that is held in case of Boiler sale and lease back transaction with M/s. Madras Fertilizer Ltd., and I hold that assessee is not entitled for depreciation. 16. next issue is with regard to claim of depreciation on Rolling Mill Rolls Wind which is sale and lease back transaction with M/s. Trident Steel Ltd. Assessing Officer disallowed depreciation on due to non-furnishing of required details by assessee as well as lessee and supplier of equipment M/s. Somash Steel Manufacturing (P.) Ltd., Mumbai. assessee has failed to prove before Assessing Officer existence, ownership and lease transaction and it is basic requirement to prove these things before Assessing Officer. If any evidence was produced before CIT(A) for first time, I.T. Rules require Remand Report from Assessing Officer before admitting it as evidence and without calling Remand Report from Assessing Officer, CIT(A) cannot admit same. In view of this, I am inclined to set aside issue to file of Assessing Officer with direction to verify genuineness of documents produced before CIT(A) and decide issue in accordance with law. 17. next issue relates to claim of Guest House Expenses and Research fee Expenses. I agree with findings of ld. J.M. and these grounds are allowed. 18.In result, ITA No.121/99 dismissed and ITA Nos. 119, 120, 122 and 123/99 are partly allowed. ORDER UNDER SECTION 255(4) OF INCOME-TAX ACT, 1964 Since there is difference of opinion, following questions are framed and referred to Hon'ble President for nominating Third Member. I.T.A. Nos. 120 & 122 (Mds.)/99 (Assessment years 1993-94 & 1994-95) (1) In facts and circumstances of case, when transaction of sale and lease back of bio-gas generating system between assessee (a leasing company) and M/s. Western Paques India Ltd. is proved by documentary evidence produced before lower authorities, whether claim of depreciation could be rejected on ground that machinery was not put to use by lessee? (2) Whether in facts and circumstances of case, when assessee furnished details of installation, bio-gas generating systems to Assessing Officer as per information furnished by M/s. Western Paques India Ltd., can statement recorded from personnel of M/s. Sandoz India Ltd. and M/s. Rohit Pulp and Papers Ltd. be relied upon without examining anybody from M/s. Western Paques India Ltd. for doubting existence of machinery especially when explanation of assessee to show-cause notice was not controverted or found to be false? (3) Whether in facts and circumstances of case, for grant of depreciation to assessee in respect of transaction of lease between assessee and M/s. Western Paques India Ltd., proof of transaction between M/s. Western Paques India Ltd. and Sandoz India Ltd. or M/s. Rohit Pulp & Paper Mills Ltd. are relevant especially when both Members agreed that Tribunal was not concerned with subsequent transaction in very same order while dealing with Solar Power Radio Telephone System, lease transaction between assessee and M/s. Renewable Energy Systems Ltd.? (4) Whether Assessing Officer is justified in disallowing claim of depreciation for assessment year 1993-94 in proceeding under section 154 in view of debatable nature of issue? I.T.A. No. 123(Mds.)/99 (Assessment Year 1995-96) (1) Whether in facts and circumstances of case, there was genuine sale and lease back transaction of boiler between assessee and M/s. Madras Fertilizers Ltd.? (2) When sale of boiler was subjected to sales tax and it was treated as sale of goods under Sales Tax Act, can sale of said boiler be doubted in income-tax proceeding especially when jurisdictional High Court in case of CIT v. Anandha Metal Corporation [2005] 273 ITR 262 (Mad.) held that return accepted by commercial tax department is binding on income-tax authorities? (3) When admittedly, boiler attached to ammonia plant could be removed and sold and second-hand such boilers are available for sale in open market, can it be said that boiler is immovable property? (4) In facts and circumstances of case, when M/s. Madras Fertilizers Ltd. is under obligation to deliver boiler to assessee after expiry of lease period, can it be said that there was no intention to sell boiler? (5) Whether in facts and circumstances of case, and in view of specific agreement between parties wherein Madras Fertilizers Ltd. specifically agreed to redeliver boiler and there was no obligation on part of assessee to resell boiler to Madras Fertilizers Ltd. after expiry of lease period, can it be said that there was no intention to sell boiler? (6) Merely because boiler was in use when sale and lease back transaction was entered into, can it be said that there was no intention to sell boiler especially when Orissa High Court in case of Industrial Development Corporation of Orissa Ltd. (supra) held that similar sale and lease back transaction was genuine? (7) When there is judgment of High Court (Constitutional authority) available on subject, whether judicial discipline requires to follow judgment of High Court in preference to decision of Special Bench of this Tribunal (statutory authority)? (8) Whether in facts and circumstances of case, decision of Special Bench of Tribunal in case of Mid East Portfolio Management Ltd. (supra) is distinguishable? (9) Whether in facts and circumstances of case, there was genuine lease transaction between assessee and M/s. Sree Rayalaseema genuine lease transaction between assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd. in respect of Waste Heat Recovery Equipment? (10) Whether in facts and circumstances of case, registration of land is condition precedent for grant of depreciation in respect of lease transaction between assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd.? (11) Whether in facts and circumstances of case, in view of specific agreement between parties to redeliver Waste Heat Recovery Equipment to assessee after expiry of lease period and there was no obligation on part of assessee to resell same to lessee, can it be said that there was no intention to sell Waste Heat Recovery Equipment? (12) Whether in facts and circumstances of case, there was genuine sale and lease back of Wind Electric Generator between assessee and M/s. Prakash Industries Limited? (13) In facts and circumstances of case, when assessee, leasing company introduced Wind Electric Generator in leasing business, whether commercial production of electricity by lessee is pre-condition for grant of depreciation to assessee in respect of leasing transaction? (14) In facts and circumstances of case, whether there was genuine lease transaction between assessee and M/s. Trident Steels Ltd. with regard to Rolling Mills Rolls? (15) When assessee has produced sufficient material to prove purchase and lease back of Rolling Mills Rolls to M/s. Trident Steels Ltd., can claim of assessee be rejected merely because supplier M/s. Somash Steel Manufacturing Pvt. Ltd. and lessee M/s. Trident Steels Ltd. have not responded to Assessing Officer? We direct registry to place appeal files before Hon'ble President for nominating Third Member. THIRD MEMBER ORDER Per M.K. Chaturvedi, Vice-President. - These appeals came before me as Third Member to express my opinion on following questions:- Questions in ITA Nos. 120 & 122(Mds.)/1999:- (1) In facts and circumstances of case, when transaction of sale and lease back of bio-gas generating system between assessee (a leasing company) and M/s. Western Paques India Ltd. is proved by documentary evidence produced before lower authorities, whether claim of depreciation could be rejected on ground that machinery was not put to use by lessee? (2) Whether in facts and circumstances of case, when assessee furnished details of installation, bio-gas generating systems to Assessing Officer as per information furnished by M/s. Western Paques India Ltd., can statement recorded from personnel of M/s. Sandoz India Ltd. and M/s. Rohit Pulp and Papers Ltd. be relied upon without examining anybody from M/s. Western Paques India Ltd. for doubting existence of machinery especially when explanation of assessee to show-cause notice was not controverted or found to be false? (3) Whether in facts and circumstances of case for grant of depreciation to assessee in respect of transaction of lease between assessee and M/s. Western Paques India Ltd., proof of transaction between M/s. Western Paques India Ltd. and Sandoz India Ltd. or M/s. Rohit Pulp & Paper Mills Ltd. are relevant especially when both Members agreed that Tribunal was not concerned with subsequent transaction in very same order while dealing with Solar Power Radio Telephone System, lease transaction between assessee and M/s. Renewable Energy Systems Ltd.? (4) Whether Assessing Officer is justified in disallowing claim of depreciation for assessment year 1993-94 in proceeding under section 154 in view of debatable nature of issue? Questions in ITA No.123 (Mds.)/1999:- (1) Whether in facts and circumstances of case, there was genuine (1) Whether in facts and circumstances of case, there was genuine sale and lease back transaction of boiler between assessee and M/s. Madras Fertilizers Ltd.? (2) When sale of boiler was subjected to sales tax and it was treated as sale of goods under Sales Tax Act, can sale of said boiler be doubted in income-tax proceeding especially when jurisdictional High Court in case of Anandha Metal Corporation (supra) held that return accepted by commercial tax department is binding on income-tax authorities? (3) When admittedly boiler attached to ammonia plant could be removed and sold and second-hand such boilers are available for sale in open market, can it be said that boiler is immovable property? (4) In facts and circumstances of case, when M/s. Madras Fertilizers Ltd. is under obligation to deliver boiler to assessee after expiry of lease period, can it be said that there was no intention to sell boiler? (5) Whether in facts and circumstances of case, and in view of specific agreement between parties wherein Madras Fertilizers Ltd. specifically agreed to redeliver boiler and there was no obligation on part of assessee to resell boiler to Madras Fertilizers Ltd. after expiry of lease period, can it be said that there was no intention to sell boiler? (6) Merely because boiler was in use when sale and lease back transaction was entered into, can it be said that there was no intention to sell boiler especially when Orissa High Court in case of Industrial Development Corporation of Orissa Ltd. (supra) held that similar sale and lease back transaction was genuine? (7) When there is judgment of High Court (Constitutional authority) available on subject, whether judicial discipline requires to follow judgment of High Court in preference to decision of Special Bench of this Tribunal (statutory authority)? (8) Whether in facts and circumstances of case, decision of Special Bench of Tribunal in case of Mid East Portfolio Management Ltd. (supra) is distinguishable? (9) Whether in facts and circumstances of case, there was genuine lease transaction between assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd. in respect of Waste Heat Recovery Equipment? (10) Whether in facts and circumstances of case, registration of land is condition precedent for grant of depreciation in respect of lease transaction between assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd.? (11) Whether in facts and circumstances of case, in view of specific agreement between parties to redeliver Waste Heat Recovery Equipment to assessee after expiry of lease period and there was no obligation on part of assessee to resell same to lessee, can it be said that there was no intention to sell Waste Heat Recovery Equipment? (12) Whether in facts and circumstances of case, there was genuine sale and lease back of Wind Electric Generator between assessee and M/s. Prakash Industries Ltd.? (13) In facts and circumstances of case, when assessee, leasing company introduced Wind Electric Generator in leasing business, whether commercial production of electricity by lessee is pre-condition for grant of depreciation to assessee in respect of leasing transaction? (14) In facts and circumstances of case whether there was genuine lease transaction between assessee and M/s. Trident Steels Ltd. with regard to Rolling Mills Rolls? (15) When assessee has produced sufficient material to prove purchase and lease back of Rolling Mills Rolls to M/s. Trident Steels Ltd., can claim of assessee be rejected merely because supplier M/s. Somash Steel Manufacturing Pvt. Ltd. and lessee M/s. Trident Steels Ltd. have not responded to Assessing Officer? In regard to ITA Nos. 119 & 122/(Mds.)/1999 there is no disagreement between Learned Members. Hence reference in respect of these appeals appears to have been made inadvertently. 2. ITA Nos. 120 & 122(Mds.)/1999 (Assessment years: 1993-94 and 1994- 95):- I have considered rival submissions in light of material placed before me and precedents relied upon. assessee is leasing company. solitary common issue raised in these appeals relates to question whether depreciation could be denied on bio-gas generating system on ground that transaction in question was sale and lease back transaction and machinery was not put to use by lessee. next issue relevant to assessment year 1993-94 only relates to question whether claim of depreciation could be denied by resorting to section 154 of Act. 3. In regard to first issue I find that matter is no longer res integra. law is trite on subject. Once leasing or finance company, which owns machinery and leases it out to third party, is found to have satisfied other requirements of provision, it would be entitled to deduction of depreciation in respect of such machinery or plant. Where business of assessee consists of hiring out machinery and/or where income derived by assessee from hiring of such machinery is business income, assessee must be considered as having used machinery for purpose of its business. In case of Pinnacle Finance Ltd. (supra) Hon'ble High Court has held that assessee, company carrying on business of financing, investment, leasing, etc., which leased out boiler, was entitled to depreciation under section 32 of Income-tax Act, 1961, in relation thereto. In deciding this issue ratio laid down by Hon'ble Supreme Court in case of Shaan Finance (P.) Ltd. (supra) was followed. Hon'ble Madras High Court in case of CIT v. Annamalai Finance Ltd. [2005] 275 ITR 451 has held that where business of assessee consists of hiring out of machinery and where income derived by assessee from such hiring is treated as business income of assessee it must be considered that assessee has used machinery for purpose of its business as such Tribunal was right in granting 100 per cent depreciation on steel rollers. 4. In view of aforesaid decisions I concur with decision of learned Judicial Member on this issue. 5. next issue relating to disallowance by resorting to provisions of section 154 is also stands covered by decision of Apex Court rendered in case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50. In this case Hon'ble Supreme Court has held that mistake apparent on record must be obvious and patent mistake and not something which can be established by long drawn process of reasoning on points on which there may be conceivably two opinions. decision on debatable point of law is not mistake apparent from record. issue involved in present appeal is debatable issue. s such it cannot be rectified by resorting to section 154. I concur with decision of learned Judicial Member in this regard. 6. ITA No. 123(Mds.)/1999 (Assessment year: 1995-96):- first issue relates to allowability of depreciation on Boiler -Ammonia Plant in respect of sale and lease back transaction with M/s. Madras Fertilizers Ltd. 7. I have considered rival submissions in light of material placed before me and precedents relied upon. learned Accountant Member was of opinion that transaction was in nature of financial transaction and as such assessee was not entitled to depreciation. learned Judicial Member held that intention of parties and surrounding circumstances clearly show that there was real sale and lease back transaction. As such Commissioner(Appeals) was correct in allowing depreciation benefit to assessee. It transpires from perusal of records that Assessing Officer has visited plant and verified asset. assessee did make payment of sales-tax at 8 per cent of value of boiler on basis of invoice raised by M/s. Madras Fertilizers Ltd. amount of sales-tax was duly paid on transaction and sales-tax assessment was completed accordingly. On that basis it was argued that transaction was in respect of sale of goods under Sales-tax Act. Reliance was placed on decision of jurisdictional High Court rendered in case of Anandha Metal Corporation (supra), wherein it was held that valuation accepted by sales-tax authorities is binding on income-tax authorities. 8. main plank of learned departmental representative's argument was that since boiler is embedded to earth, it is not movable asset and as such valid transfer is not effected. I find that this issue stands covered by decision of Special Bench of Tribunal (Mumbai Bench-C) rendered in case of Mid East Portfolio Management Ltd. (supra). At page 651, para 154, Special Bench of Tribunal held as under:- '154. On this aspect also there were considerable arguments. Several authorities were also relied upon by both sides on question. We find that cases have proceeded all along on footing that assets/equipment are only movable items. That is reason why Sale of Goods Act and provisions in Contract Act relating to bailment of goods, 'opinion of Benjamin' on sale etc. were referred to. It was only for first time before us that argument was raised by Mr. Dave, ld. CIT(DR) that boilers (in case of ICICI Ltd.) were immovable assets. Mr. Dastur has rightly objected to this point being raised for first time before Special Bench. He is also right in contending that question whether asset is movable or immovable asset is matter of evidence and it is for person contending that asset is immovable to show first that it is attached to or forms part of land. These objections are valid and must be upheld. We therefore hold that assets (Air pollution equipment in case of Mid East Portfolio Management Ltd. and boilers in case of ICICI Ltd.) are movable assets and that is how cases have proceeded so far. In this view of matter it is not necessary to discuss authorities cited by both sides on point.' boiler was held to be movable asset. No other decision of binding nature was brought before me in this regard. Respectfully following precedent I agree with view taken by learned Judicial Member in this respect. Question Nos. 1 to 8 in ITA No. 123/Mds./1999 stand decided accordingly. 9. next issue contained in question Nos. 9 to 11 relates to genuineness of sale and lease back transaction between assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd. in respect of waste heat recovery equipment. only objection raised by revenue in this regard was that land on which equipment was fixed was not transferred to assessee. learned Accountant Member held that as it does not fit into definition of goods as defined in Sale of Goods Act, depreciation was rightly denied by Assessing Officer. 10. It was submitted before me that recuperator is equipment. It is movable asset and sale was subjected to levy of sales-tax. It could be repossessed, conveyed and shifted independently. Repossession rights were given to assessee in eventuality of default by lessee. There was no obligation attached in lease to sell asset back to lessee. Reliance was also placed on decision of jurisdictional High Court rendered in case of Anandha Metal Corporation (supra). Identification of equipment was made with reference to valuation report. It was further stated that seller has removed asset from net block. 11. In view of above, I am inclined to agree with learned Judicial Member. 12. next issue contained in question Nos. 12 and 13 relates to question whether there was genuine sale and lease back transaction between t h e assessee and M/s. Prakash Industries Ltd. in respect of wind electric generator. learned Accountant Member held that transaction is similar to boiler in case of M/s. Madras Fertilizers Ltd. and as such no depreciation is to be allowed. learned Judicial Member held that since assessee is in business of leasing, handing over possession would be more than sufficient for putting equipment on use in business of leasing. There was genuine lease-transaction between assessee and lessee. In case of Industrial Development Corporation of Orissa Ltd. (supra) it was held that where sale and lease back transaction is genuine, depreciation is to be allowed on asset. Besides, I find that issue is covered by decision of Apex Court rendered in case of Shaan Finance (P.) Ltd. (supra), decision of Gujarat High Court rendered in case of Pinnacle Finance Ltd. (supra) and also decision of jurisdictional High Court rendered in case of Annamalai Finance Ltd. (supra), as discussed in para 3 above. Respectfully following precedents I concur with decision of learned Judicial Member on this issue. 13. last issue relates to question whether there was genuine lease transaction between assessee and M/s. Trident Steels Ltd. with regard to Rolling Mills Rolls. I have heard rival submissions. Before Assessing Officer details were not furnished by supplier and lessee in response to letters issued. details of transit insurance were not given. learned Accountant Member set aside matter to Assessing Officer for verification. Both parties agreed that issue may be examined with reference to direction of learned Accountant Member. Ex consequenti I agree with decision of learned Accountant Member in this regard. 14. matter will now go before Regular Bench for deciding appeals in accordance with majority. Per Chandra Poojari, Accountant Member. - As learned Members differed in their opinion on point in adjudication in cases in ITA Nos. 120, 122 & l23/Mds./99, after due deliberations between them, Hon'ble President of Tribunal, on reference to him, Point of Difference, appointed Third Member to hear case and give his opinion. Accordingly, Third Member heard these cases and gave his opinion. In ITA Nos. 119 & 121/Mds./99, there is no difference of opinion. However, they were referred by mistake to learned Third Member. 2. I.T.A. Nos. 120 to 122/Mds./1999: In these two appeals, learned Third Member, by his order dated 6-4-2006, has concurred with view of learned JM regarding allowability of depreciation of Bio-Gas Generating System which is SLB transaction between assessee and M/s. Western Paques India Ltd. and in accordance with majority view, revenue's appeals are dismissed. 3. I.T.A. No.l23/Mds./1999: In this appeal, learned Third Member, by his order dated 6-4-2006, has concurred with view of learned JM regarding allowability of depreciation on Boiler which is SLB transaction between assessee and M/s. Madras Fertilizers Ltd. Accordingly, ground relating to this issue raised by revenue is dismissed. 4. As regards depreciation on Waste Heat Recovery Equipment, which is SLB transaction between assessee and M/s. Sree Rayalaseema Hi-Strength Hypo Ltd., learned Third Member has concurred in with view taken by learned JM. Accordingly, revenue's appeal on this issue is rejected. 5. Regarding depreciation on Wind Electric Generator which is SLB transaction between assessee and M/s. Prakash Industries Ltd., learned Third Member has concurred with view of learned JM on this issue. Accordingly, revenue's appeal on this issue is dismissed. 6. Regarding depreciation on Rolling Mills Rolls which is SLB transaction between assessee and M/s. Trident Steels Ltd., learned Third Member has concurred with view of learned AM, and set aside matter to f i l e of Assessing Officer for verification. Accordingly, this issue in revenue's appeal is allowed for statistical purpose. 7. In result, appeals in ITA Nos. 119, 120, 121 & 122/Mds./99 are dismissed and appeal in ITA No. 123/Mds./99 is partly allowed. *** JOINT COMMISSIONER OF INCOME TAX v. INVESTMENT TRUST OF INDIA LTD.